Trade

SBP Refinance Scheme

  • Export Refinance Scheme
  • Long Term Financing Facility for Plant and Machinery
  • Refinancing Facility for Modernization of SMEs
  • Scheme for Financing Power Plants using Renewable Energy.

(BOK also offer any other financing facility announced by SBP from time to time)

EXPORT-REFINANCE PART-I: Under Part-I of the Scheme, the commercial banks provide concessionary finance to the exporters for financing the exports of eligible commodities on case-by-case basis against individual Firm Export Order or Irrevocable Letter of Credit. Firm Export Order includes contract of sale, confirmation order for sale, purchase order, proforma invoice and similar other documents evidencing purchase of goods by foreign buyers.
EXPORT-REFINANCE Part-II: Under Part-II of the Scheme, an exporter may avail of concessionary export finance limit in a financial year equal to half of the export performance, through export of eligible commodities, in the preceding financial year (July – June).  The limit is available to the exporter on a revolving basis like a cash credit account.
EXPORT-REFINANCE: The Export Finance Scheme envisages the provision of concessionary financing facility to the exporters by the Scheduled Banks.  The Banks are granted annual refinance limits by State Bank of Pakistan for providing finance to their clients (exporters).  Banks provide export finance to the exporters both at pre-shipment as well as post-shipment stages at a concessionary rate of mark-up
PACKING CREDIT-II: Packing credit is basically a loan provided to exporters or sellers to finance the goods' procurement before shipment. The bank will make the funds available to a letter of credit issued favoring the seller and a confirmed order for selling the goods or services.
EXPORT FORM (E-FORM):  It's a declaration that this export is being processed against the foreign exchange either it has arrived in the exporting country or is contracted to arrive after shipment maturity.
BILLS PURCHASE: There are bills drawn on sight basis. These are to be paid on presentation. If a bank lends against such bills receivable, it is called as bill purchase.
FOREIGN DOCUMENTARY BILL FOR COLLECTION (FDBC): A documentary collection is a trade transaction in which the exporter hands over the task of collecting payment for goods supplied to his or her bank, which sends the shipping documents to the importer's bank together with payment instructions.
EXPORT ADVANCE PAYMENT: This refers to method of export payment in which exporter recieves the payment in advance for its consignment that is to be exported/shipped later on.
EXPORT BILL REALIZATION: The reciept & conversion of foreign exchange into local currency against the export bill on DP/DA/LC.
DOCUMENTARY LETTER OF CREDIT: A letter issued by a bank to another bank (especially one in a different country) to serve as a guarantee for payments made to a specified person under specified conditions.
  • LETTER OF CREDIT - USANCE
  • LETTER OF CREDIT - SIGHT
  • LETTER OF CREDIT - MIXED PAYMENT
  • STAND BY LETTER OF CREDIT
INLAND LETTER OF CREDIT : Inland letter of credit is an obligation of the bank that opens the letter of credit (the issuing bank) to pay the agreed amount to the seller on behalf of the buyer, upon receipt of the documents specified in the letter of credit under domestic business transaction.
  • INLAND LETTER OF CREDIT -USANCE
  • INLAND LETTER OF CREDIT - SIGHT
  • INLAND LETTER OF CREDIT - MIXED PAYMENT
SHIPPING GUARANTEE - SG: Shipping Guarantee (SG) is an indemnity given by the customer, countersigned by the Bank, to a shipping company or its agent to allow the shipping company to release the goods to the customer (consignee named in the Bill of Lading) without the presentation of the original Bill of Lading.
  • SHIPPING GUARANTEE -USANCE
  • SHIPPING GUARANTEE -SIGHT
CONTRACT PAYMENT: Money given to a contractee from a contractor for the purpose of making payments like advance, interim, performance payments,advancement payments, or/and other similar payments
  • CONTRACT PAYMENT -SIGHT
  • CONTRACT PAYMENT-USANCE
DOCUMENT ACCEPTANCE -DA: An arrangement in which an exporter instructs a bank to hand over shipping and title documents (see document of title) to an importer only if the importer accepts the accompanying bill of exchange or draft by signing it.
IMPORT UNDER CONTRACT: The import contract is suitable when a company is buying goods from abroad by way of importin the course of a business to business transaction. The contract seta out the standard terms and conditions of purchase. This type of contract include clauses covering: price and payment, delivery, sub-contracting, title and risk, packaging, inspection, indemnity, confidentiality, and termination.
  • IMPORT UNDER CONTRACT - USANCE
  • IMPORT UNDER CONTRACT - SIGHT
IMPORT ADVANCE PAYMENT: This facility allows the importer to release payment against import in advance and prior to shipment. However SBP hasrestricted the amount of advance payment against import to $10,000 without Letter of Credit & upto 100% of the proforma invoice incase of Letter of Credit.
TRADE FINANCE LOAN - TFL: Trade loans are flexible, short-term borrowing facilities, linked to specific import or export transactions. They are available for firms regardless of the method they use to trade, whether open account, collections or documentary credit basis. Trade loans help fund trade transactions throughout a firm’s trading cycle, improving its cashflow.

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